Late Contributions - Lost Earnings 3 Years in a Row

[Vlad401k]

Hi,

 

We have a plan that has late contributions every year for the past 3 years. It is my understanding that we can only rely on the VFCP correction method (and using the VFCP calculator) if late contributions happen at most in 2 of the last 3 years. Is that correct? If that's the case, what happens if the plan used the VFCP method in the previous 2 years (2016 and 2017) and had late contributions again this past year (2018)? Should we use the plan earnings to calculate what the participants are due? What if the plan lost money in 2018?

 

Thank you.

[Larry Starr]

3 hours ago, Vlad401k said:

Hi,

 

We have a plan that has late contributions every year for the past 3 years. It is my understanding that we can only rely on the VFCP correction method (and using the VFCP calculator) if late contributions happen at most in 2 of the last 3 years. Is that correct? If that's the case, what happens if the plan used the VFCP method in the previous 2 years (2016 and 2017) and had late contributions again this past year (2018)? Should we use the plan earnings to calculate what the participants are due? What if the plan lost money in 2018?

 

Thank you.

I'll let others advise you on the specifics of your posting, but, geez, one has to ask WHY is this client not following orders for what is now 3 years in a row?????  Time for a "come to Jesus meeting" or a client termination!

[RatherBeGolfing]

8 hours ago, Vlad401k said:

It is my understanding that we can only rely on the VFCP correction method (and using the VFCP calculator) if late contributions happen at most in 2 of the last 3 years.

Are you sure you are not confusing this with the class exemption?  You can only use the class exemption on one transaction every three years.